C M Y K. Contents Reports and Accounts of :

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1 Contents Reports and Accounts of : Page No. 1. Alija International Pty Ltd Astral Holdings Inc Astral Jewels LLC Astral USA, Inc Bernies International LLC Daily Jewellery Ltd Global Marine Diamond Company Intergems H. K. Ltd Lume Germany GmbH Lume Group AG Matts Jewellery LLC (Formerly known as C & A Diamonds International LLC) Shrenuj Australia Pty. Ltd Shrenuj Bostwana Pty. Ltd Shrenuj Diajewels Ltd Shrenuj DMCC Shrenuj Gems & Jewellery Pvt. Ltd Shrenuj Glitters Ltd Shrenuj GmbH Shrenuj Japan Corporation Shrenuj Jewelry (Far East) Ltd Shrenuj (Mauritius) Pvt. Ltd Shrenuj N V Shrenuj Overseas Ltd Shrenuj (Shanghai) Diamonds Pvt. Ltd Shrenuj South Africa Pty Ltd Shrenuj UK Ltd Shrenuj USA LLC Simon Golub & Sons Inc CEPS2 D\SALES\SAURAV\SHRENUJ AR 09 SUB\SHRENUJ CONTENTS 09.PMD\AMD\1-9

2 Alija International Pty Limited Alija International pty Ltd Compilation Report TO THE MEMBERS OF Alija International pty Ltd Scope On the basis of information provided by the directors of Alija International Pty Ltd, we have compiled in accordance with APES 315: Statement on Compilation of Financial Reports the special purpose financial report of Alija Intemational pty Ltd for the year ended 31 March The specific purpose for which the special purpose financial report has been prepared is set out in Note 1. The extent to which Accounting Standards and other mandatory professional reporting requirements have or have not been adopted in the preparation of the special purpose financial report is set out in Note 1. The directors are solely responsible for the information contained in the special purpose financial report and have determined that the accounting policies used are consistent with the financial reporting requirements of Alija International Pty Ltd s constitution and are appropriate to meet the needs of the directors and members of the company. Our procedures use accounting expertise to collect, classify and summarise the financial information, which the directors provided into a financial report. Our procedures do not include verification or validation procedures. No audit or review has been performed and accordingly no assurance is expressed. To the extent permitted by law, we do not accept liability for any loss or damage which any person, other than the company, may suffer arising from any negligence on our part. No person should rely on the special purpose financial report without having an audit or review conducted. The special purpose financial report was prepared for the benefit of the directors and members of Alija International Pty Ltd and the purpose identified above. We do not accept responsibility to any other person for the contents of the special purpose financial report. Maria Ralton For Diane Yeomans & Associates Pty Ltd Dated : 15th June CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Alija International Pty Limited 2009.PMD -- Pravin/5/08/09\AMD\1-9

3 Alija International Pty Ltd Balance Sheet As at 31st March, 2009 Profit & Loss Statement For the year ended 31st March, 2009 AUD AUD Assets Current Assets Income Sales Returns and Allowances 2,383,297 (307) 83,770,411 (10,791) Cash On Hand Freight Collected 7, ,942 Cheque Account 70,688 2,484,610 Late Fees Collected 1,233 43,339 Miscellaneous Income 1,215 42,706 USD Account 80,298 2,822,391 Total Income 2,392,805 84,104,607 Saver Account 22, ,779 Cost of Sales Paid Up Capital 100 3,515 Purchases 1,607,525 56,502,832 Total Cash On Hand 173,840 6,110,295 Returns (106,236) (3,734,085) Foreign Currency Exchange 244,734 8,602,146 Trade Debtors 651,882 22,912,974 Discounts Given 37,984 1,335,098 Amounts not yet applied (1,071) (37,645) Repairs 4, ,938 Customs & Duty 63,347 2,226,581 Stock on Hand 1,157,511 40,685,308 Opening Stock 890,778 31,309,920 SACL Stock GST Exc 210,666 7,404,691 Closing Stock (1,157,511) (40,685,308) Security Bond 1,833 64,428 Total Cost of Sales 1,585,342 55,723,122 Total Current Assets 2,194,661 77,140,051 Fixed Assets Office Equipment Office Equip at Cost 105,519 3,708,883 Office Equip Accum Dep (53,035) (1,864,125) Total Office Equipment 52,484 1,844,758 Total Fixed Assets 52,484 1,844,758 Goodwill Goodwill 600,000 21,089,376 Total Goodwill 600,000 21,089,376 Total Assets 2,847, ,074,185 Liabilities Current Liabilities Trade Creditors 639,875 22,490,941 GST Liabilities GST Collected 124,363 4,371,230 GST Paid (130,932) (4,602,124) Total GST Liabilities (6,569) (230,894) Payroll Liabilities PAYG Withheld Payable 38,581 1,356,082 Superannuation Payable 11, ,185 Total Payroll Liabilities 49,625 1,744,267 Customer Deposits 2, ,779 Total Current Liabilities 685,912 24,109,093 Long Term Liabilities Loan Alija Gems & Jewellery 47,889 1,683,249 Loan Shrenuj UK 1,075,865 37,815,536 Loan - Facet HK 261,704 9,198,623 Loan - Facet HK - SACL GST Inc 231,733 8,145,174 Loan Shrenuj Diajewels 14, ,278 Provision for Income Tax (9,615) (337,957) Total Long Term Liabilities 1,622,435 57,026,903 Total Liabilities 2,308,347 81,135,996 Net Assets 538,798 18,938,189 Equity Owner/Shareholder s Equity Share Premium Reserve 600,000 21,089,376 Issued and Paid Up Capital 100 3,515 Total Owner/Shareholder s Equity 600,100 21,092,891 Retained Earnings 46,145 1,621,949 Current Year Earnings (107,447) (3,776,651) Total Equity 538,798 18,938,189 (Exchange rate used for translation 1 AUD = ) Note: We have translated the Australian Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such Australian Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. Gross Profit 807,463 28,381,485 Expenses General & Administrative Exp Accounting Fees 11, ,368 Legal Fees 5, ,715 Bad Debts ,418 Bank Charges 1,545 54,305 Bank Charge Merchant 2,118 74,445 Amex Fees 65 2,285 Certificates 68 2,390 Computer Expenses 2,322 81,616 Collection Fees 1,103 38,769 Filing Fees 212 7,452 Heat Light and Power 1,789 62,881 Insurance 19, ,442 Subscriptions 1,812 63,690 Licence Fees 1,195 42,003 Carnet Fees 1,483 52,126 Valuations 110 3,866 Office Supplies 4, ,574 Packaging 15, ,790 Discounts Taken (1,613) (56,695) Freight Paid 34,613 1,216,611 Fines 81 2,847 Total General & Administrative Exp 104,040 3,656,898 Advertising & Promotion Exp Advertising 7, ,099 In-store Promotions 7, ,204 Trade Shows 20, ,105 Gift 233 8,190 Total Advertising & Promotion Exp 36,974 1,299,598 Operating Expenses Postage 10, ,018 Parking 2,364 83,092 Printing & Stationery 3, ,315 Rent 45,559 1,601,351 Water Rates ,613 Removalist costs 4, ,961 Security 6, ,769 Telephone 15, ,647 Tolls 1,044 36,696 Travel 122,471 4,304,728 Car Expense 7, ,043 Total Operating Expenses 219,814 7,726,233 Employment Expenses Staff Amenities 1,207 42,425 Superannuation 40,401 1,420,053 Wages & Salaries 501,708 17,634,514 Workers Compensation 5, ,713 Other Employer Expenses 8, ,842 Total Employment Expenses 557,813 19,606,547 Total Expenses 918,641 32,289,276 Operating Profit (111,178) (3,907,791) Other Income Interest Income 5, ,962 Total Other Income 5, ,962 Other Expenses Income Tax Expense 1,958 68,822 Total Other Expenses 1,958 68,822 Net Profit / (Loss) (107,447) (3,776,651) (Exchange rate used for translation 1 AUD = ) 2 2 CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Alija International Pty Limited 2009.PMD -- Pravin/5/08/09\AMD\1-9

4 Astral Holding BALANCE SHEET AS AT 31ST MARCH 2009 LIABILITIES SCHEDULE USD SHARE CAPITAL A RESERVES & SURPLUS B ( ) ( ) SECURED LOANS C UNSECURED LOANS D ASSETS INVESTMENTS E CURRENT ASSETS, LOANS & ADVANCES F Cash & Bank Balance Loans & Advance CURRENT LIABILITIES & PROVISIONS G Current Liabilites (26370) ( ) NET CURRENT ASSETS PRELIMINARY EXPS NOT W/OFF ASTRAL HOLDING INC PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2009 INCOME USD Sales and Services - - Other Income - - EXPENDITURE Manufacturing & Other Expenses Interest PROFIT BEFORE TAXATION (524763) ( ) Less:Provision for Taxation-Current - - Provision for Deferred Taxation - - PROFIT AFTER TAXATION (524763) ( ) Add:Balance Brought Forwad (260585) ( ) Excess provision for Taxation in respect of previous years written back - - (785348) ( ) APPOPRIATION Transfer to General Reserve - - Proposed Dividend - - Tax on Proposed Dividend - - Balance carried to Balance Sheet (785348) ( ) (785348) ( ) GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH 2009 USD SCHEDULE A - Share Capital Issued Subscribed And Paid-up Fully paid-up SCHEDULE B - Reserves and Surplus Capital Resrves ( ) ( ) Surplus in P&L A/c (785348) ( ) ( ) ( ) SCHEDULE C - Secured Loans Term Loan from Bank SCHEDULE D - Unsecured Loans Short term Loans & Advance from: Inter-Corporate Deposit SCHEDULE E - Investments SCHEDULE F -Current Assets,Loans & Advances A. Balance with Scheduled Banks Current Accounts B. Loans & Advances Due from Subsidiary Company Advances recoverable in cash or in kind or for value to be recevied TOTAL (A) + (B) GROUPINGS OF PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH 2009 Other Expenses: USD Legal & Professional Charges Miscellaneous Expenses Preliminery expenses w/off Total Interest Interest paid Less interest received (1190) (60357) Total TOTAL (524763) ( ) Net profit after tax (524763) ( ) Opening Balance B/fd. (260585) ( ) Balance available for appropriation (785348) ( ) (Exchange rate used for translation 1USD = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. SCHEDULE G -Current Liabilities and Provisions A. CURRENT LIABILITES Sundry Creditors/Related parties (Exchange rate used for translation 1USD = 50.72) CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Shrenuj Astral holding 09.PMD---pradip 21-8\AMD\1-9

5 Astral Jewels ASTRAL JEWELS LLC BALANCE SHEET AS AT 31ST MARCH, 2009 PROFIT & LOSS A/C. FOR THE YEAR ENDED 31ST MARCH, 2009 LIABILITIES SCHEDULE USD SCHEDULE USD SHARE CAPITAL A INCOME RESERVES & SURPLUS B (791711) ( ) Sales and Services G UNSECURED LOANS C Other Income H (553411) ( ) EXPENDITURE Material Cost I ASSETS Manufacturing & FIXED ASSETS D Other Expenses J Depreciation K Gross Block Less: Depreciation PROFIT BEFORE TAXATION (467980) ( ) Net Block Less: Provision for Taxation - Current - - CURRENT ASSETS, LOANS Provision for Deferred Taxation - - & ADVANCES E PROFIT AFTER TAXATION (467980) ( ) Inventories Add: Balance Brought Forward (323731) ( ) Excess provision for taxation in Sundry Debtors respect of previous years written back - - Cash & Bank Balance Loans & Advance Balance carried to Balance Sheet (791711) ( ) CURRENT LIABILITIES & PROVISIONS F Current Liabilites NET CURRENT ASSETS (583627) ( ) (553411) ( ) GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH 2009 USD SCHEDULE A - Share Capital Issued Subscribed And Paid-up Fully paid-up SCHEDULE B - Reserves and Surplus Surplus in P&L A/c (791711) ( ) (791711) ( ) SCHEDULE C - Unsecured Loans Short term Loans & Advance from: Loan from Group Company SCHEDULE D - Fixed Assets Cost Less : Depreciation SCHEDULE E -Current Assets, Loans & Advances A. Current Assets Inventories Finished Goods Sundry Debtors Current Accounts B. Loans & Advances Advances recoverable in cash or in kind or for value to be recevied TOTAL (A) + (B) SCHEDULE F -Current Liabilities and Provisions A. CURRENT LIABILITES Sundry Creditors/Related parties (Exchange rate used for translation 1USD = 50.72) GROUPINGS OF PROFIT & LOSS A/C. FOR THE YEAR ENDED 31ST MARCH, 2009 USD SCHEDULE G - Sales Sales Total SCHEDULE H - Other Income Sundry Receipts Total SCHEDULE I - Material Cost Purchase of Finished Goods Valuation in Stock Stock at close Less: Stock at commencement Material Cost SCHEDULE J - Manufacturing & Other Expenses Rent Employees s Emoluments: Salaries, Wages, Gratuity, Bonus etc Welfare expenses Selling & Distribution Expenses: Freight & forwarding charges Commission Other Selling & Distribution Expenses Other Expenses: Insurance Other Repairs Legal & Professional Charges Travelling, Conveyance and Vehicle expenses Miscellaneous Expenses SCHEDULE K - Depreciation Depreciation TOTAL (Exchange rate used for translation 1USD = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. 4 4 CEPS2 D:\Sales\Saurav\SHRENUJ SUB-09\Astral Jewels 09.PMD----pradip 21-8

6 Astral USA Astral USA INC BALANCE SHEET AS AT 31ST MARCH 2009 USD LIABILITIES SCHEDULE SHARE CAPITAL A RESERVES & SURPLUS B (137658) ( ) SECURED LOANS - - UNSECURED LOANS C TOTAL ASSETS INVESTMENTS D CURRENT ASSETS, LOANS & ADVANCES E Cash & Bank Balances Loans & Advances CURRENT LIABILITIES & PROVISIONS F Current Liabilities NET CURRENT ASSETS TOTAL PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2009 USD INCOME Sales and Services - - Other Income - - EXPENDITURE Manufacturing & Other Expenses Interest PROFIT BEFORE TAXATION (26245) ( ) Less: Provision for Taxation - Current - - Provision for Deferred Taxation - - PROFIT AFTER TAXATION (26245) ( ) Add: Balance Brought Forward (111413) ( ) Excess provision for taxation in respect of previous years written back - - (137658) ( ) APPROPRIATION Transfer to General Reserve - - Proposed Dividend - - Tax on Proposed Dividend - - Balance carried to Balance Sheet (137658) ( ) (137658) ( ) GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH 2009 USD SCHEDULE A - Share Capital Issued Subscribed And Paid-up Fully paid-up SCHEDULE B - Reserves and Surplus Surplus in P&L A/c (137658) ( ) (137658) ( ) SCHEDULE C - Unsecured Loans Short term Loans & Advance from: Inter Corporate Deposit Loan from Group Company SCHEDULE D - Investments SCHEDULE E -Current Assets,Loans & Advances A. Balance with Scheduled Banks Current Accounts B. Loans & Advances Due from Subsidiary Company Advances recoverable in cash or in kind or for value to be recevied TOTAL (A) + (B) GROUPINGS OF PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH 2009 Other Expenses USD Legal & Professional Charges Miscellaneous Expenses Total Interest Interest paid - - Less interest received - - Total - - TOTAL (26245) ( ) Net profit after tax (26245) ( ) Opening Balance B/fd. (111413) ( ) Balance available for appropriation (137658) ( ) (Exchange rate used for translation 1USD = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. SCHEDULE F -Current Liabilities and Provisions A. CURRENT LIABILITES Sundry Creditors/Related parties (Exchange rate used for translation 1USD = 50.72) 5 5 CEPS2 D:\Sales\Saurav\SHRENUJ SUB - 09\Shrenuj Astral USA 09.PMD---pradip 21-8

7 HBK HILL, BARTH & KING LLC, 7680.Market Street Youngstown, Ohio (330) PHONE (330) FAX www,hbkcpa,com Members Bernie s International LLC Canfield, Ohio May 12, 2009 We have reviewed the accompanying balance sheets of Bernie s International. LLC as of March 31, 2009 and 2008 and the related statements of operations and members equity and cash flows for the years then ended in accordance with Statements on Standards for Accounting and Review Services issued, by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Bernie s International LLC. A review consists principally of inquiries of Company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which, is the expression of an opinion regarding the financial statements taken, as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. Our reviews were made primarily for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying information on page 9, presented only for supplementary analysis purposes, has been subjected to the inquiry and analytical procedures applied in the reviews of the basic financial statements. Based on our reviews, we are not aware of any material modifications that should be made to such information. Sd/- Certified Public Accountants BALANCE SHEETS March 31, 2009 and 2008 (See Accountants Review Report) ASSETS US$ US$ CURRENT ASSETS Cash 52,168 29,041 2,645,961 1,472,960 Accounts receivable trade 40,414 91,449 2,049,798 4,638,293 Accounts receivable member 16, ,139 - Inventories 711, ,354 36,094,076 26,240,195 Prepaid expenses 1,231 3,248 62, ,739 TOTAL CURRENT ASSETS 822, ,092 41,707,410 32,516,187 PROPERTY AND EQUIPMENT Fixtures and. equipment 34,448 34,448 1,747,203 1,747,203 Vehicles 10,731 10, , ,276 45,179 45,179 2,291,479 2,291,479 Less accumulated depreciation 26,326 19,168 1,335, ,201 NET PROPERTY AND EQUIPMENT 18,853 26, ,224 1,319,278 OTHER ASSET Goodwill 100, ,000 5,072,000 5,072, , ,103 47,735,634 38,907,465 LIABILITIES AND MEMBERS EQUITY CURRENT LIABILITIES Accounts payable trade 7,908 22, ,094 1,156,670 Accrued expenses 5,852 10, , ,312 TOTAL CURRENT LIABILITIES 13,760 33, ,907 1,706,982 ACCOUNTS PAYABLE AFFILIATE 125, ,921 6,365,157 33,268,313 NOTE PAYABLE TO AFFILIATE 699,999-35,503,949 - TOTAL LIBILITIES 839, ,576 42,567,013 34,975,295 MEMBERS EQUITY 101,905 77,527 5,168,621 3,932,170 Ses accompanying notes to financial statements Exchange rate used for translation 1 US$ = , ,103 47,735,634 38,907,465 STATEMENTS OF OPERATIONS AND MEMBERS EQUITY Years ended March 31, 2009 and 2008 (See Accountants Review Report) US$ US$ OPERATING INCOME Sales 846, ,924 42,950,761 49,194,545 Cost of sales (529,374) (665,180) (26,849,849) (33,737,929) GROSS PROFIT 317, ,744 16,100,912 15,456,616 OPERATING EXPENSES (293,069) (308,988) (14,864,460) (15,671,871) INCOME (LOSS) FROM OPERATIONS 24,378 (4,244) 1,236,452 (215,255) OTHER INCOME AND (EXPENSE) Gain on sale of assets ,504 Interest - (260) - (13,187) ,317 NET INCOME (LOSS) 24,378 (3,804) 1,236,452 (192,938) MEMBERS EQUITY Beginning of year 77,527 81,331 3,932,169 4,125,108 End of year 101,905 77,527 5,168,621 3,932,170 See accompanying notes to financial statements Exchange rate used for translation 1 US$ = STATEMENTS OF CASH FLOWS Years ended March 31, 2009 and 2008 (See Accountants Review Report) US$ US$ CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) 24,378 (3,804) 1,236,452 (192,939) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 7,158 7, , ,054 Provision for doubtful accounts 16,919 17, , ,500 Gain on sale of assets - (700) - (35,504) Decrease in accounts receivable trade 17,256 35, ,224 1,808,067 (Increase) decrease in inventories (194,280) 107,200 (9,853,882) 5,437,184 Decrease in prepaid expenses 2, ,302 35,555 Decrease in accounts payable trade (14,897) (2,906) (755,576) (147,392) Decrease in accrued expenses (4,998) (3,644) (253,499) (184,824) Decrease in accounts payable affiliate (530,425) (124,103) (26,903,156) (6,294,504) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (676,872) 32,634 (34,330,949) 1,655,197 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of assets ,504 NET CASH PROVIDED BY INVESTING ACTIVITIES ,504 CASH FLOWS FROM FINANCING ACTIVITIES Payments on long-term debt - (28,169) - (1,428,732) Increase in note payable to affiliate 699,999-35,503,949 - CASH NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 699,999 (28,169) 35,503,949 (1,428,732) NET INCREASE IN CASH 23,127 5,165 1,173, ,969 Beginning of year 29,041 23,876 1,472,960 1,210,991 End of year 52,168 29,041 2,645,961 1,472,960 See accompanying notes to financial statements Exchange rate used for translation 1 US$ = CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Bernie s International LLC.pmd -- PRAVIN/6/07\AMD\1-9

8 Bernie s International LLC STATEMENTS OF OPERATING EXPENSES Years ended March 31, 2009 and 2008 (See Accountants Review Report) PERCENT AMOUNT (US$) AMOUNT () OF SALES Advertising 10,847 6, , , Credit card fees 8,741 12, , , Commissions - 1,318-66, Contributions 1,844 2,289 93, , Depreciation 7,158 7, , , Dues and subscriptions ,671 26, Employee benefits 11,317 9, , , Insurance 5,986 9, , , Office 9,554 3, , , Outside services 24,930 47,060 1,264,450 2,386, Payroll 101,611 89,846 5,153,710 4,556, Payroll managing member 40,000 40,000 2,028,800 2,028, Payroll taxes 11,465 10, , , Professional fees 7,701 8, , , Provision for doubtful accounts 16,919 17, , , Rent 16,275 18, , , Supplies 4,014 1, ,590 63, Taxes 4,185 7, , , Telephone 6,991 4, , , Travel and entertainment 1,567 4,295 79, , Vehicle expense 1,379 8,321 69, , TOTALS 293, ,988 14,864,462 15,671, Exchange rate used for translation 1 US$ = NOTES TO FINANCIAL STATEMENTS March 31, 2009 and 2008 (See Accountants Review Report) NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Company s Activities: The Company was formed in Delaware in 2005 and operates in Ohio as a wholesale jewelry outlet in. Columbus, Ohio. Accounts Receivable Trade: Accounts receivable trade represents amounts due directly from customers. The potential risk is limited to the amount recorded in the financial statements. They are stated at the amount management expects to collect from balances outstanding at year end. Based on management s assessment of the credit history with, customers having outstanding balances and current relationships with them, they have concluded that no allowance for doubtful accounts was necessary at March 31, 2009 and Inventories: Merchandise inventories are valued at the lower of cost or market which is determined by the specific identification method. Property and Equipment: Property and equipment are recorded at cost and are depreciated over the estimated useful lives of the assets using the straight-line method. Goodwill: Goodwill represents the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. The Company accounts for its goodwill, in accordance with Statement of Financial Accounting Standards No. 142, which requires the Company to test goodwill for impairment annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The evaluation is performed by comparing the carrying value of the assets to their estimated fair value including goodwill. Management determined that the carrying value of goodwill was not impaired at March 31, 2009 and Economic Dependence: Purchases for the years ended March 31, 2009 and 2008 included purchases from one major supplier that individually accounted for substantially all of the Company s product. Management believes no risk is present under this agreement due to other suppliers being readily available. Income Taxes: The Company is a limited liability entity and does not pay federal or state income taxes. The members proportionate share of the Company s taxable income or loss is included on their income tax returns. In June 2006, the FASB issued Interpretation No. 418, Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109 (FIN 48). This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise s financial statementsin accordance with SFAS No. 109 Accounting for Income Taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. This statement is effective for annual, fiscal years beginning after December 15, 2008, for certain nonpublic enterprises, and accordingly the Company has deferred its adoption. While the Company has not completely assessed its uncertain tax positions, it currently estimates that the impact of adopting FIN 48 will not have a material effect on the accompanying financial statements. Revenue Recognition: The Company recognizes revenue from the sale of Jewelry when the certificate and risks of ownership are transferred to the customer, which is upon shipment or customer pick-up. Advertising Costs: Advertising costs are expensed when incurred. Charges to operations amounted to $10,847 ( 550,160) in 2009 and $6,650 ( 337,288) in Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at, the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from, those estimates. NOTE B - NOTE PAYABLE TO AFFILIATE Note payable to affiliate consisted of unsecured non-interest bearing advances with no scheduled repayment terms from.astral USA, Inc., a member of the Company, (Exchange rate used for translation 1 US$ = 50.72) NOTE C - OPERATING LEASE The Company leases its retail facility under a lease!agreement with options to renew. The lease is treated as an operating lease for financial statement purposes. Charges to operations amounted to $16,275 ( 8,25,468) in 2009 and $24,231 (12,28,996) in Future minimum lease payment under the operating lease for the year ending March 31, 2010, is $ 2,387 ( 1,21,069). NOTE D - CONTROLLING INTEREST AND RELATED PARTY TRANSACTIONS Controlling Interest: Astral USA, Inc. owns 60% of the Company. Related Party Transactions: The Company purchases inventory from C & A Diamonds International LLC (C & A Diamonds), a related entity. Total purchases amounted to $565,845 ( 2,86,99,658) in 2009 and $412,100 ( 2,09,01,712) in The Company purchases inventory from Astral USA, Inc, a related entity. Total purchases amounted to $33,434 ( 16,95,772) in 2009 and $ 0 ( - 0) in The Company purchases inventory from Simon Golub and Sons, a related entity. Total purchases amounted to $25,081 ( 12,72,108) in 2009 and $-0- ( - 0) in The Company also subcontracts jewelry repair services to C & A Diamonds. Total repair services amounted to $-0- ( - 0) in 2009 and $26,870 ( 13,62,846) in The Company sold jewelry to C & A Diamonds totaling $600 ( 30,432) in 2009 and $3,937 ( 1,99,685) in Due to the common control of these entities, the financial position and results of operations of the Company could be different if the entities were autonomous. (Exchange rate used for translation 1 US$ = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. 7 7 CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Bernie s International LLC.pmd -- PRAVIN/6/07\AMD\1-9

9 BALANCE SHEET AT 31ST MARCH, HK$ HK$ NON-CURRENT ASSETS Fixed assets 1,240,276 2,077,299 8,116,483 13,594,040 Unlisted Investments 3,965 3,965 25,947 25,947 1,244,241 2,081,264 8,142,430 13,619,987 CURRENT ASSETS Trade and other receivables 11,894,193 11,902,121 77,836,717 77,888,599 Inventories 23,797,378 26,255, ,732, ,821,562 Deposits 2,044,748 1,964,505 13,381,023 12,855,905 Bank balances and cash 967,571 1,385,069 6,331,876 9,064,022 38,703,890 41,507, ,281, ,630,088 CURRENT LIABILITIES Trade, other payables and related parties 50,598,372 52,777, ,120, ,383,303 50,598,372 52,777, ,120, ,383,303 INCOME STATEMENT FOR THE YEAR ENDED 31ST MARCH, HK$ HK$ TURNOVER Cost of sales ( ) ( ) ( ) ( ) Gross profit Other revenue Administrative expenses ( ) ( ) ( ) ( ) LOSS FROM OPERATIONS ( ) ( ) ( ) ( ) Finance costs (424762) (379634) ( ) ( ) LOSS BEFORE TAXATION ( ) ( ) ( ) ( ) Taxation NET LOSS FOR THE YEAR ( ) ( ) ( ) ( ) (Exchange rate used for translation 1 HK$ = ) NET CURRENT LIABILITIES (11,894,482) (11,270,195) (77,838,608) (73,753,215) TOTAL ASSETS LESS CURRENT LIABILITIES (10,650,241) (9,188,931) (69,696,178) (60,133,228) NET LIABILITIES (10,650,241) (9,188,931) (69,696,178) (60,133,228) CAPITAL AND RESERVES SHARE CAPITAL 5,000,000 5,000,000 32,720,470 32,720,470 ACCUMULATED LOSSES (15,650,241) (14,188,931) (102,416,648) (92,853,698) SHAREHOLDERS DEFICIT (10,650,241) (9,188,931) (69,696,178) (60,133,228) (Exchange rate used for translation 1 HK$ = ) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH, 2009 Share Accumulated Share Accumulated Capital Losses Total Capital Losses Total HK$ HK$ HK$ Balance as at 1st April, ,000,000 (9,947,648) (4,947,648) 32,720,470 (65,098,344) (32,377,874) Net loss for the year - (4,241,283) (4,241,283) - (27,755,355) (27,755,355) Balance as at 31st March, ,000,000 (14,188,931) (9,188,931) 32,720,470 (92,853,699) (60,133,229) Net loss for the year - (1,461,310) (1,461,310) - (9,562,950) (9,562,950) Balance as at 31st March, ,000,000 (15,650,241) (10,650,241) 32,720,470 (102,416,649) (69,696,179) (Exchange rate used for translation 1 HK$ = ) Note: We have translated the Hongkong Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such Hongkong Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. 8 8 CEPS 2\D\Sales\Saurav\Shrinuj AR 09 Sub\Daily Jewellery 09.pmd --- Sagam\8-8\pgp \pravin/4/09

10 Daily Jewellery Limited NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, FIXED ASSETS Furniture Office Casting Motor Furniture Office Casting Motor and fixtures equipment moulds vehicle Total and fixtures equipment moulds vehicle Total HK$ HK$ HK$ HK$ HK$ 2009 Cost: As at ,244, , ,460 30,000 7,120,735 40,866,866 2,227,793 3,307, ,323 46,598,760 Additions 278,584 20, ,784 1,823, , ,955,271 As at ,523, , ,460 30,000 7,419,519 42,689,946 2,359,984 3,307, ,323 48,554,031 Aggregate depreciation: As at ,288, , ,368 6,000 5,043,436 28,067,292 1,597,531 3,300,632 39,265 33,004,720 Charge for the year 1,075,080 53,635 1,092 6,000 1,135,807 7,035, ,992 7,146 39,265 7,432,828 As at ,364, , ,460 12,000 6,179,243 35,102,717 1,948,523 3,307,778 78,530 40,437,548 Net book value: As at ,159,401 62,875-18,000 1,240,276 7,587, , ,793 8,116,483 (Exchange rate used for translation 1 HK$ = ) 9 AMOUNT DUE FROM RELATED COMPANIES Balance as at Balance as at Maximum outstanding Balance as at Balance as at Maximum outstanding Name of Company during the year during the year HK$ HK$ HK$ (a) Inter Gems (H.K.) Limited 4,337,655-4,337,655 28,386,022-28,386,022 The advances to the related company is interest free, unsecured and with no fixed term (Exchange rate used for translation 1 HK$ = ) 4,337,655-4,337,655 28,386,022-28,386, CEPS 2\D\Sales\Saurav\Shrinuj AR 09 Sub\Daily Jewellery 09.pmd --- Sagam\8-8\pgp \pravin/4/09

11 Global Marine Diamond Company BALANCE SHEET AS AT 31ST MARCH, 2009 LIABILITIES SCHEDULE USD SHARE CAPITAL A ASSETS CURRENT ASSETS, LOANS & ADVANCE B Loans & Advances GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH, 2009 USD SCHEDULE A - Share Capital Issued Subscribed And Paid-up Fully paid-up SCHEDULE B - Current Assets, Loans & Advances Loans & Advances Advances recoverable in cash or in kind or for value to be recevied (Exchange rate used for translation 1 USD = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all Ceps 2 D:\Sales\Saurav\Shrenuj sub-09\global Marine Diamond 09.PMD----vk24-8\AMD\1-9

12 INTER-GEMS (H.K.) LIMITED INTER-GEMS (H.K.) LIMITED DETAILED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, HK$ HK$ SALES 314,631, ,742,614 2,058,975,239 2,740,291,028 LESS: COST OF SALES Opening stock 7,495,676 7,116,447 49,052,408 46,570,698 Purchases 335,404, ,848,109 2,194,919,793 2,642,819, ,900, ,964,556 2,243,972,201 2,689,390,685 Less: Closing stock (40,436,248) (7,495,676) (264,618,608) (49,052,408) 302,464, ,468,880 1,979,353,593 2,640,338,277 Transportation 51,264 35, , ,614 Declaration 221, ,783 1,446, , ,736, ,648,903 1,981,135,517 2,641,516,365 GROSS PROFIT 11,894,652 15,093,711 77,839,722 98,774,663 Bank interest income 46, , , ,248 Exchange gain - 15, ,009 Other interest income 260,341-1,703,696 - Rental income 379, ,000 2,480,539 1,688,376 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH, 2009 Share Retained Share Retained capital profits Total capital profits Total HK$ HK$ HK$ Balance as at 1st April, ,000 1,009,785 1,510, Net profit for the year 0 3,092,452 3,092, Balance as at 31st March, ,000 4,102,237 4,603,237 3,278,591 26,845,425 30,124,016 Net profit for the year 0 1,465,103 1,465, Balance as at 31st March, ,000 5,567,340 6,068,340 3,278,591 36,433,197 39,711,788 (Exchange rate used for translation 1 HK$ = ) Note: We have translated the Hongkong Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such Hongkong Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. 12,580,421 15,483,625 82,327, ,326,296 LESS: ADMINISTRATIVE EXPENSES (6,784,720) (9,116,262) (44,399,845) (59,657,675) LESS: FINANCE COST (3,983,443) (2,663,740) (26,068,025) (17,431,765) PROFIT BEFORE TAXATION 1,812,258 3,703,623 11,859,589 24,236,856 (Exchange rate used for translation 1 HK$ = ) BALANCE SHEET AS AT 31ST MARCH, HK$ HK$ NON-CURRENT ASSETS Fixed assets Membership debenture Investment in subsidiary company CURRENT ASSETS Stock Prepayment, rental and utility deposits Amount due from related companies Accounts and others receivable Cash and bank balances CURRENT LIABILITIES Trust receipt payable Mortgage loan - current portion Accounts and others payable Accrued expenses Rental deposit received Amount due to related companies Amount due to directors ( ) ( ) Provision for taxation (102709) (672137) NET CURRENT LIABILITIES (512440) ( ) ( ) ( ) TOTAL ASSETS LESS CURRENT LIABILITIES LONG-TERM LIABILITIES Mortgage loan ( ) ( ) ( ) ( ) NET (LIABILITIES)/ASSETS Financed by: SHARE CAPITAL RETAINED PROFITS SHAREHOLDERS FUND (Exchange rate used for translation 1 HK$ = ) CEPS 2\D\SALES\SAURAV\SHRINUJ AR 09 SUB\INTER-GEMS HK 09.PMD\AMD\11-8/PRAVIN/17/08/pravin/4.9-

13 LUME GERMANY GMBH BALANCE SHEET AT 31ST MARCH, 2009 ASSETS 2009 EURO EURO Capital Assets Tangible assets Other Machinery & Equpement Finance Assets Other Advances - - Circulating Assets Receivables Receivables goods & Services Other receivables Other Assets Not covered with capital resources (Contra) LIABILITIES Capital resources Capital Stock / Equity Capital Reserve Accumulated deficit carry over ( ) ( ) Annual deficit ( ) ( ) Not covered (Contra) Accruals Other accruals Debts Debts goods & service Current portion Debts Intercompany Current portion Other Debts CERTIFICATE The prescribed end of the year procedures have been done by me on the basis of the books examined by me and the submitted proofs of existence as well as the information given by: Lume Germany GmbH Pforzheim An evaluation of the correctness of these documents and specifications of the enterprise has been done in accordance with the limited scope about the type and range. Based on these the evaluation of correctness is reported. An evaluation of the correctness of any other documents and specifications was not subject of the assignment. Ottmar Deibele Tax Counsel Disclaimer: The original financials are issued in German. The above presented is only the translation in English. (Exchange rate used for translation 1 EURO = ) Note: We have translated the EURO amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such EURO amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. INCOME STATEMENT FOR THE YEAR ENDED 31ST MARCH, EURO EURO Sales / Turnover Other Operating Income Other Operating Income Material Consumption: Purchase raw material & supplies ( ) ( ) Processing charges ( ) ( ) ( ) ( ) Staff Cost: Salary & Labour ( ) ( ) Staff benefits ( ) ( ) ( ) ( ) Depreciation: Depreciation ( ) ( ) Other operating costs Office rent (399.15) ( ) Insurance (183.50) ( ) Vehicle Expenses ( ) ( ) Exhibition, travelling, adrvt., ( ) ( ) Transport ( ) ( ) Other operating costs ( ) ( ) (Loss)/Capital Gain from capital assets - - Other expenses in the frame of the usual business activity ( ) ( ) ` ( ) ( ) ( ) ( ) Interest ` ( ) ( ) Profit or (Loss) on ordinary activities ( ) ( ) Other taxes ` ( ) ( ) Annual Deficit ` ( ) ( ) CEPS 2\D\Sales\Saurav\Shrenuj AR 2009 Sub\Lume Germany GMBH 2009.pmd\vk24-8\AMD\1-9/pravin/4.9

14 Lume Group AG BALANCE SHEET AS AT 31ST MARCH, 2009 Lume Group AG PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2009 LIABILTIES SCHEDULE CHF SHARE CAPITAL A RESERVES & SURPLUS B TOTAL ASSETS FIXED ASSETS C Gross Block Less : Depreciation - - Net Block CURRENT ASSETS, LOANS & ADVANCE D Inventories Sundry Debtors Cash & Bank Balances CURRENT LIABILITIES & PROVISIONS E Current Liabilites NET CURRENT ASSETS ( ) ( ) TOTAL INCOME SCHEDULE CHF Sales and Services F EXPENDITURE Material Cost G Manufacturing & Other Expenses H PROFIT BEFORE TAXATION Less:Provision for Taxation-Current - - PROFIT AFTER TAXATION Add:Balance Brought Forwad Balance carried to Balance Sheet GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH, 2009 CHF SCHEDULE A - Share Capital Issued Subscribed And Paid-up Fully paid-up SCHEDULE B - Reserves and Surplus Surplus in P&L A/c SCHEDULE C - Fixed Assets Gross Block Less : Depreciation - - Net Block SCHEDULE D - Current Assets, Loans & Advances A. Current Assets Inventory Sundry Debtors / Related parties Cash SCHEDULE E - Current Liabilities and Provisions Sundry Creditors / Related parties Other liabilities GROUPINGS OF PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2009 CHF SCHEDULE F - Sales Sales Total SCHEDULE G - Material Cost Cost of Sales SCHEDULE H - Manufacturing & Other Expenses Vehicle & transport expenses Administration & computer expenses Advertising & travelling expenses Financial income/ expenses Depreciation (525) (23399) (Exchange rate used for translation 1 CHF = ) Note: We have translated the Swiss Frank amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such Swiss Frank amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. (Exchange rate used for translation 1 CHF = ) CEPS2 D:\Sales\Saurav\Shrenuj sub \Lume Group AG 2009.PMD---vk24-8\AMD\1-9

15 MATTS JEWELLERY LLC BALANCE SHEET AS AT 31ST MARCH, 2009 LIABILITIES SCHEDULE USD SHARE CAPITAL A RESERVES & SURPLUS B (659227) ( ) UNSECURED LOANS C ASSETS CURRENT ASSETS, LOANS & ADVANCE D Cash & Bank Balance CURRENT LIABILITIES & PROVISIONS E Current Liabilites NET CURRENT ASSETS PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2009 INCOME SCHEDULE USD Sales and Services F Other Income G (148578) ( ) EXPENDITURE Material Cost H Manufacturing & Other Expenses I Depreciation J PROFIT BEFORE TAXATION (600823) ( ) Less:Provision for Taxation-Current - - Minority Interest PROFIT AFTER TAXATION (360494) ( ) Add:Balance Brought Forwad (298733) ( ) Balance carried to Balance Sheet (659227) ( ) GROUPINGS OF BALANCE SHEET AS AT 31ST MARCH, 2009 USD SCHEDULE A - Share Capital Issued Subscribed and Paid-up Fully paid-up SCHEDULE B - Reserves and Surplus Surplus in P&L A/c (659227) ( ) (659227) ( ) SCHEDULE C - Minority Interest Equity Share of Opening Reserves (199154) ( ) Share of Profit (240329) ( ) SCHEDULE D -Current Assets, Loans & Advances A. Current Assets Cash on Hand Current Account SCHEDULE E -Current Liabilities and Provisions A. CURRENT LIABILITES Sundry Creditors/Related parties (Exchange rate used for translation 1 USD = 50.72) Note: We have translated the American Dollar amounts into Rupees at the closing rate as on 31st March The translations should not be considered as a representation that such American Dollar amounts have been, could have been or could be converted into at any particular rate, the rate stated above, or at all. GROUPINGS OF PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2009 SCHEDULE F - Sales USD Sales Total SCHEDULE G - Other Income Sundry Receipts Profit on Sale of Asset (148748) ( ) Total (148578) ( ) SCHEDULE H - Material Cost Purchase of Finished Goods Valuation in Stock Stock at close - - Less: Stock at commencement Material Cost SCHEDULE I - Manufacturing & Other Expenses Power & fuel Rent Rates & Taxes Other Manufacturing Expenses Employees s Emoluments: Salaries, Wages, Gratuity, Bonus etc Contribution to PF etc Welfare expenses Selling & Distribution Expenses: Freight & forwarding charges Adversisement Expenses Commission Other Selling & Distribution Expenses Other Expenses: Insurance Other Repairs Legal & Professional Charges Bad Debts Travelling, Conveyance and Vehicle expenses Miscellaneous Expenses SCHEDULE J - Interest & Depreciation To Bank Depreciation (Exchange rate used for translation 1 USD = 50.72) CEPS2 D:\Sales\Saurav\SHRENUJ SUB \Matts Jewellery LLC 2009.pmd ---vk24-8\amd\1-9/pravin/4.9